When you want to give to charity.

• Author: Jaffee, Jamie B.
• Position: Personal Financial Planning

Charitable giving in America is as diverse as the lives of the millions of individuals who give to more than one-half million charitable organizations. Individual philanthropy takes many forms, from a quarter casually tossed into a bell ringer's kettle at Christmas, to a line of limos delivering guests to a charity ball, to the creation of complicated philanthropic vehiles--foundations, trusts, annuities-designed to maximize the size of the gift and the tax benefit that you, the giver, receive.

The American Association of Fund-Raising Counsel (AAFRC) estimates that in 1991 Americans donated nearly $125 billion to charitable organizations. Approximately 82 percent of this total was donated by living individuals, while another 8 percent was left to charities as individual bequests. The total represents a slight increase when adjusted for inflation from 1990's total, indicating that the nation's economic recession didn't have a significant negative impact on personal giving.

However, a more recent survey by the Gallup Organization for Independent Sector, a coalition of charities and grant makers based in Washington, D.C., shows otherwise, with respondents reporting that economic insecurity caused them to cut back on the amount they gave in 1991.

It's not surprising that two major studies should provide somewhat conflicting results; charitable giving, with or without a recession, is as complex as it is diverse. For example, not unexpectedly, the wealthiest Americans give the most to charity. But the very poor, those making under $10,000 a year, give a higher percentage of their income than those in the middle-income brackets.

BECOME CHARITY-SAVVY

The demands on your charitable dollars can seem overwhelming, and you're constantly looking for ways that your philanthropy can make a real difference. How do you choose whom to give to ? And how can you be sure the charities are doing what they claim with your money?

The public's confidence in the nonprofit sector was shaken a bit in the wake of last year's allegations of financial improprieties at the United Way of America. Fortunately, information about charities and their finances is available. The Tax Reform Act of 1969 requires all nonprofits and foundations to file an Annual Form 990 with the Internal Revenue Service, although it specifically exempts churches and religious organizations.

Also, many charities will willingly provide copies of their most recent 990 forms, which list executive...